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How I can estimate the restricted Cobb-Douglas Production Function with three factor inputs of the form:

Y = A*(K^alpha)(L^beta)(N^gamma); alpha + beta + gamma = 1
where
Y = Output
K = Capital
L = Labor, and
N = Land

Please help me out with the estimating of this function in Eviews.

You can take logs and do a linear regression or you can do a nonlinear regression.

Perhaps you should tell what us you've done so far and where you got stuck.

Thanks for your comments.

Given function:

Y = A*(K^alpha)*(N^beta)*(L^gemma)
where,
K = Capital
N = Labour
L = Land
and, given restriction:

alpha + beta + gemma = 1

I want to run a regression of the form.

log(Y) = A + (1 - beta - gemma)*log(K) + (1-alpha - gemma)*log(N) + (1-alpha - beta)*log(L)

I failed to run this regression in Eviews.

Please help me either with the estimation of the function in Eviews and with the functional form.

Thanks.

Imran Ali wrote:Thanks for your comments.

Given function:

Y = A*(K^alpha)*(N^beta)*(L^gemma)
where,
K = Capital
N = Labour
L = Land
and, given restriction:

alpha + beta + gemma = 1

I want to run a regression of the form.

log(Y) = A + (1 - beta - gemma)*log(K) + (1-alpha - gemma)*log(N) + (1-alpha - beta)*log(L)

I failed to run this regression in Eviews.

Please help me either with the estimation of the function in Eviews and with the functional form.

Thanks.

In EViews, coefficients are named c(1), c(2), etc., rather than "beta,"

so you want to do something like
log(y) = c(1) +c(2)*log(k) + c(3)*log(N) + (1-c(2)-c(3))*log(L)

Once again thanks for your help. But my this does not solve my problem. See if i run this regression i did not get the sum of all three coefficients equal to one. So please tell me if there's any problem with the functional form. How do I specify the Cobb-Douglass Production function with three inputs and neutral technology in the Eviews. Regards

Maybe you should post exactly what you are doing, so people can take a look.

The discussion under the Putting limits on estimated coefficient values thread might help. Please always do a simple search before posting your questions, since they may have already been answered somewhere in the forum.

HI,
i want to estimate a translog cost function and I need to put some restrictions, I used the following model
log(y) = c(1) +c(2)*log(k) + c(3)*log(N) + (1-c(2)-c(3))*log(L)
I get the cofficient for c(1), c(2), c(3)
For (1-c(2)-c(3))*log(L) am I suppose to just do 1 minus the results for the two coefficient?

Those don't look like the right restrictions for a Cobb-Douglas.

this si the translog cost function
ln(C(q;wL,wK,wM)) = c + cq * ln(q) + cL * ln(wL) + cK * ln(wK) + cM * log(wM)
+ .5 * [dqq * ln(q)^2 + dLL * ln(wL)^2 + dKK * ln(wK)^2 + dMM * ln(wM)^2]
+ .5 * [(dLK + dKL) * ln(wL)*ln(wK) + (dLM + dML) * ln(wL)*ln(wM) + (dKM + dMK) * ln(wK)*log(wM)]
+ dLq * ln(wL)*ln(q) + dKq * ln(wK)*ln(q) + dMq * ln(wM)*ln(q)
and the restrictions are:
1 = cL + cK + cM
0 = dLL + dLK + dLM
0 = dKL + dKK + dKM
0 = dML + dMK + dMM
0 = dLq + dKq + dMq
0 = dLq, 0 = dKq, 0 = dMq, 1 = cq

Then yes, "c(4)" = 1 -c(2) -c(3)

Hello,

I am running a regression with a linear restriction on a coefficient as in

Y = alpha*X1 + beta*X2 + (1-alpha-beta)*X3 + error

Eviews only returns the estimates for alpha and beta as well as their standard errors.

To get the estimate of the coefficient for X3, I do manually 1-alpha-beta.

However, how do I compute the standard error of this paramater?

Thanks

View/Wald statistic

startz wrote:View/Wald statistic

Code: Select all

0=1-alpha-beta

Hello Startz,

Many thanks indeed for your valuable help.

Much appreciated.

Kind regards.